Item 1.01 - Entry into a Material Definitive Agreement

Paycheck Protection Program Loan

On April 28, 2020, A.M. Castle & Co. (the "Company") entered into an unsecured loan in the aggregate principal amount of $10.0 million (the "Loan") with PNC Bank, National Association (the "Lender") pursuant to the Paycheck Protection Program (the "PPP") administered by the Small Business Administration (the "SBA"). The PPP is part of the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") passed by the United States Federal Government to provide economic relief to U.S. companies impacted by the Novel Coronavirus Disease (COVID-19) pandemic, and it provides for forgivable loans to qualifying businesses in a maximum amount equal to the lesser of $10.0 million and 2.5 times the average monthly payroll expenses of the qualifying business. The Company qualified for the Loan under the "alternative size standard" promulgated under Section 3(a)(5) of the Small Business Act (15 U.S. Code § 632(a)(5)) with (i) a maximum tangible net worth of not more than $15M and (ii) average net income after Federal income taxes (excluding any carry-over losses) for the two full fiscal years preceding the application of not more than $5M. After taking into account, among other things, the disruptions to the Company's business activities caused by the COVID-19 pandemic, its recapitalization transaction completed on March 27, 2020, its available, committed primary sources of liquidity, and its lack of access to alternative sources of liquidity, current economic conditions made this loan request necessary and appropriate to support the Company's ongoing United States operations (approximately 580 employees at 11 locations) and avoid significant detriment to the Company's business.

The Loan is evidenced by a Paycheck Protection Program Term Note, dated as of April 28, 2020 (the "Note"), in the principal sum of $10.0 million, between the Company, as the borrower, and the Lender. The Note matures on April 28, 2022, and bears interest at a fixed rate of 1.0 percent per annum, with the first six months of interest deferred. To the extent the Loan is not forgiven, the Loan is payable in 17 monthly payments commencing on November 16, 2020, and may be prepaid at any time prior to maturity with no prepayment penalties. The Loan is subject to customary events of default including the non-payment of principal or interest as and when due, which may result in the acceleration of all Loan amounts outstanding, the application of interest at a default rate and/or Lender's exercise of any of the rights and remedies available under the Loan or under applicable law.

The proceeds of the Loan may only be used for payroll expenses, rent, utilities, mortgage interests, and interest on other pre-existing indebtedness (the "permissible purposes"). In order to obtain full or partial forgiveness of the Loan, the Company must request forgiveness and must provide satisfactory documentation in accordance with applicable SBA guidelines. The Company will be obligated to repay any portion of the principal amount of the Note that is not forgiven, together with interest accrued and accruing thereon at the rate set forth above, until such unforgiven portion is paid in full. The Company intends to use the Loan proceeds for permissible purposes only and to apply for forgiveness of the Loan in accordance with the terms of the CARES Act; however, the Company can provide no assurances that it will be eligible for forgiveness of the Loan, in whole or in part.



Under the terms of the CARES Act, the Loan, and interest accrued thereon, is
forgivable, partially or in full, if certain conditions are met. The most
significant of the conditions are:
•only amounts expended for permissible purposes during the eight week period
following Loan disbursement on April 29, 2020 are eligible for loan forgiveness;
•of the total amount of expenditures for which forgiveness can be granted, at
least 75% must be for payroll expenses, or a proportionate reduction of the
maximum loan forgiveness amount will occur; and
•if there are reductions in headcount (or employee compensation is reduced by
more than 25%) during the eight week period, a further reduction of the maximum
loan forgiveness amount will occur.

The foregoing is only a summary of certain provisions of the Note and is qualified in its entirety by the full text of the Note, which is attached to this Current Report on Form 8-K as Exhibits 10.1 and incorporated herein by reference.




                                       2

--------------------------------------------------------------------------------

Item 2.03 - Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

Reference is made to the disclosure under Item 1.01 above which is hereby incorporated in this Item 2.03 by reference.

Item 9.01 - Financial Statements and Exhibits



(d) The following exhibit is filed herewith:
Exhibit Number           Description
10.1                       Paycheck Protection Program Term Note, dated April 28, 2020, between A.M.
                         Castle & Co. and PNC Bank, National Association




                                       3

--------------------------------------------------------------------------------

© Edgar Online, source Glimpses